March 29, 2017

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Kenya to become an oil exporter in 2017

oil

Following President Kenyatta’s directive to expedite the exploration of oil wells, British energy group, Tullow Oil, has confirmed that it will start exploring for oil in Kenya in March, 2017.

“Tullow has made good progress and will be ready to start oil exportation in June 2017,” said the Chief Operating Officer of Tullow Oil, Paul McDade, during a briefing to President Kenyatta at the State House.

Both Tullow Oil and Canadian oil and gas company, Africa Oil Corp, struck oil in the Lokichar Basin in the northwest region of Kenya in 2012. Both firms had a 50 percent stake in blocks 10 BB and 13T, where the discoveries were made. However, Africa Oil sold a 25 percent stake in those blocks to A.P. Moller-Maersk and is now left with the rest.

The Kenyan government and the concerned companies are pushing to start small scale crude oil production in 2017, producing about 2,000 barrels per day. The oil will be transported by road from Lokichar in Turkana County to Mombasa where it will be exported. This is because currently, there is no pipeline running 891 km between Lokichar and Lamu on Kenya’s coast. According to Energy Cabinet Secretary, Charles Keter, this pipeline will cost $2.1 billion and should be completed by 2021.

“We have started and we are not moving back. We want to be at the top of the pile. So, we have set a path and by 2019, Kenya is going to be a major oil producer and exporter,” said President Kenyatta.

Last year, Uganda, the home of Africa’s fourth largest crude oil reserve, was in talks with Kenya to build a 1,500 km pipeline to the Kenyan port of Lamu. But in February this year, the landlocked country decided to build its pipeline with Tanzania instead.

This means that Kenya will transport its fuel on trains and trucks to the port of Lamu until the pipelines are constructed. Considering the amount of money that goes into transporting oil by land, the Kenyan government and the companies will have to spend an exorbitant amount in transporting oil between Lokichar and Lamu. To ensure the cargo’s safety, the Kenyan government also needs to put safety measures in place in order to avoid accidents while transporting these products.

Sourced from Ventures Africa, written by Fumnanya Agbugah

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